Qualifying medical expenses - SARS

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Qualifying medical expenses- SARS

We have had increased number of queries from SARS regarding allowable medical expenses that can be included in the medical tax credit calculation.

This means that we have included the out of pocket medical expenses not paid by the medical aid as part of the tax return, and SARS has come back and said that they want to see that these out of pocket expenses are actually prescribed medicine and proof that the expense was paid by the tax practitioner.

I would just like to highlight what are allowable medical deductions or what qualifies as medical fees for tax purposes.

“Amounts paid and not recovered during the year of assessment in respect of:

  • Services rendered and medicines supplied by a registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopaedist;
  • Hospitalisation in a registered hospital or nursing home;
  • Home nursing by a registered nurse, midwife or nursing assistant, including when supplied by any nursing agency;
  • Medicines prescribed by a registered physician and acquired from a pharmacist;
  • Medical expenses incurred and paid outside South Africa which is similar to the above expenses;
  • Any expenses as prescribed by the Commissioner as a result of any physical impairment or disability.”

This means that although your out of pocket medical expenses are not paid by the medical aid, un-prescribed medicine is not allowed as a SARS medical fees deduction and can be disallowed by SARS when submitting your 2015 Income tax return.

My suggestion: Please try and keep medical slips and proof of payment if possible. Because if they disallow the deduction, they will disallow everything and this means that allowable deductions won’t be allowed because it can’t be proven.

Caution: Also make sure that medical expenses are paid by the person claiming the medical expense. Even if it is your dependants name, SARS does not know who your dependants are and will disallow the medical deductions.

If you have any questions, please don’t hesitate to contact me at contactus@anlofin.com.